Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below. Essex Property Trust Inc. (NYSE:ESS) is a real estate investment trust that acquires, develops, redevelops, and manages apartment communities located in supply-constrained markets. It is set to report its Q3 2025 earnings on Oct. 28. Wall Street analysts expect the company to post EPS of $2.68, down from $3.91 in the prior-year period. According to Benzinga Pro, quarterly revenue is expected to reach $472. ...

Shares of Essex Property Trust (NYSE: ESS ) have been a poor performer over the past year, losing 13% of their value. Elevated rates have weighed on real estate valuations, and the apartment sector has faced particular pressure, given concerns about weakening rent trends. I last coveredOver fifteen years of experience making contrarian bets based on my macro view and stock-specific turnaround stories to garner outsized returns with a favorable risk/reward profile. If you want me to cover a specific stock or ...

Core Insights - The article highlights three reliable dividend-paying REITs: Essex Property Trust, Federal Realty Investment Trust, and Realty Income, emphasizing their strong track records in generating passive income from real estate investments [2][15]. Essex Property Trust - Essex Property Trust is a residential REIT focused on the West Coast, benefiting from high housing demand and occupancy rates, which drives steady rent growth [4]. - Over the past 20 years, Essex's same-property net operating income has grown by 126%, significantly outpacing the 103% average growth rate of its multifamily REIT peers [5]. - Essex has increased its dividend by 216% over the same period, compared to a 97% average for its peers, and has raised its dividend for 31 consecutive years by a cumulative 516% [6]. - The company maintains a conservative dividend payout ratio and a strong balance sheet, allowing for continued investment in its portfolio [7]. Federal Realty Investment Trust - Federal Realty is a retail REIT that focuses on high-quality mixed-use properties in affluent metro markets, emphasizing quality over quantity [8]. - Since 2005, Federal Realty has increased its FFO per share by over 134%, while larger peers have shown significantly lower growth rates [9]. - The company has maintained its dividend for 58 consecutive years, supported by a strategy of recycling capital to invest in higher-quality properties [10][11]. Realty Income - Realty Income aims to provide dependable monthly dividends, having increased its payment 131 times since its public listing in 1994, with a record of 111 consecutive quarters of dividend increases [12]. - The REIT focuses on properties that generate stable rental income, secured by long-term net leases with leading companies, particularly in resilient industries [13]. - Realty Income's adjusted FFO per share has grown at a rate of over 5% annually, supporting a compound annual dividend growth of 4.2% [14].

Core Insights - Essex Property Trust, Inc. (ESS) is positioned to benefit from a strong property base in the West Coast market, driven by high home ownership costs that are likely to sustain demand for residential rental units, thereby aiding revenue growth [1][4] - The company is focusing on leveraging technology, scale, and organizational capabilities to enhance margin expansion and operational efficiency across its portfolio [5] - A healthy balance sheet with significant liquidity and a high percentage of unencumbered net operating income (NOI) supports the company's growth prospects [6][7] Financial Performance - In Q2 2025, Essex Property reported core FFO per share of $4.03, exceeding the Zacks Consensus Estimate of $3.99, and reflecting a 2.3% improvement from the previous year [3][9] - The company raised its full-year 2025 guidance for core FFO per share, indicating positive growth expectations [3] Market Dynamics - The West Coast market, characterized by high median household incomes and a greater percentage of renters, provides a favorable environment for Essex Property [4] - However, elevated supply of rental units in certain markets is expected to increase competitive pressure, potentially limiting rent growth [2][8] Debt and Expenses - As of June 30, 2025, Essex Property had a total debt of $6.76 billion, with interest expenses rising 9.7% year-over-year to $64.2 million, indicating a substantial debt burden [10] - The net debt-to-adjusted EBITDAre ratio stood at 5.5X, reflecting the company's leverage position [6] Dividend Policy - Essex Property has consistently raised its dividend, with a five-year annualized growth rate of 4.95%, supported by a low dividend payout ratio and strong balance sheet [7] Stock Performance - Shares of Essex Property have declined by 9.4% year-to-date, slightly better than the industry's decline of 9.5%, with analysts maintaining a bullish outlook on the stock [11]

Core Insights - Essex Property Trust reported strong Q2 2025 results, with Core FFO per diluted share of $4.03, exceeding its forecast of $3.96 [1][5] - Revenue reached $467.6 million, surpassing the expected $466.33 million, and net income per share more than doubled year-over-year, driven by real estate gains [1][5] Financial Performance - Core FFO per share increased by 2.3% year-over-year, while revenue grew by 6.2% compared to the prior year [5] - Net income per share (GAAP) jumped 137.2% year-over-year, largely due to a $126.2 million gain from the sale of a Southern California property [5] - Same-property revenue growth was recorded at 3.2%, and net operating income (NOI) increased by 3.3% year-over-year [5][8] Portfolio Management - The company acquired two apartment communities in Santa Clara County for $240.5 million and sold a community in Southern California for $239.6 million [6] - Management highlighted ongoing strength in Santa Clara, San Mateo, San Francisco, and Seattle, while Los Angeles showed underperformance [6][10] Financial Strategy - Essex secured a $300 million unsecured term loan and expanded its credit facility to $1.5 billion, emphasizing liquidity and flexibility [7] - Total available liquidity at quarter's end was approximately $1.5 billion, with a net indebtedness to adjusted EBITDAre ratio of 5.5 times [7] Operational Insights - Same-property expense growth was 2.9% year-over-year, benefiting from lower property taxes in Seattle [8] - Portfolio occupancy remained stable at 96.2%, with overall delinquency improving to 0.5% [8] Regional Performance - Northern California led with 3.4% same-property revenue growth, while Seattle grew by 2.8% [9] - Southern California lagged, with Los Angeles posting only 2.8% same-property revenue growth [9] Development and Future Outlook - The company maintains a modest property development pipeline, with one major project in South San Francisco [11] - Management raised its full-year 2025 Core FFO guidance to a range of $15.80–$16.02, reflecting strong Q2 performance [12]

PART I. FINANCIAL INFORMATION Presents the unaudited condensed consolidated financial statements and related disclosures for the reporting period [Item 1. Condensed Consolidated Financial Statements](index=6&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Essex Property Trust, Inc. and Essex Portfolio, L.P. for the three and six months ended June 30, 2025 and 2024, along with detailed notes. Key financial highlights include increased net income and significant gains on real estate sales for both entities, alongside changes in assets, liabilities, equity, and cash flows [Condensed Consolidated Financial Statements of Essex Property Trust, Inc. (Unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Financial%20Statements%20of%20Essex%20Property%20Trust%2C%20Inc.%20(Unaudited)) Provides the unaudited financial statements for Essex Property Trust, Inc., detailing its financial position, performance, and cash flows [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Presents the assets, liabilities, and equity of Essex Property Trust, Inc. at specific reporting dates Essex Property Trust, Inc. - Condensed Consolidated Balance Sheets (in thousands) | Metric | Dec 31, 2024 (in thousands) | Jun 30, 2025 (in thousands) | Change (in thousands) | | :-------------------------------- | :-------------------------- | :-------------------------- | :-------------------- | | Total Assets | $12,927,359 | $13,181,490 | +$254,131 | | Total Liabilities | $7,176,120 | $7,342,654 | +$166,534 | | Total Equity | $5,720,390 | $5,805,914 | +$85,524 | [Condensed Consolidated Statements of Income and Comprehensive Income](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20and%20Comprehensive%20Income) Details the revenues, expenses, net income, and comprehensive income for Essex Property Trust, Inc. over the reporting periods Essex Property Trust, Inc. - Condensed Consolidated Statements of Income (in thousands, except per share) | Metric | 3 Months Ended Jun 30, 2024 (in thousands, except per share) | 3 Months Ended Jun 30, 2025 (in thousands, except per share) | Change (in thousands, except per share) | | :-------------------------------------- | :-------------------------- | :-------------------------- | :----- | | Rental and other property revenues | $439,782 | $467,610 | +$27,828 | | Gain on sale of real estate and land | $0 | $126,174 | +$126,174 | | Net income available to common stockholders | $92,914 | $221,362 | +$128,448 | | Basic EPS | $1.45 | $3.44 | +$1.99 | | Diluted EPS | $1.45 | $3.44 | +$1.99 | Essex Property Trust, Inc. - Condensed Consolidated Statements of Income (in thousands, except per share) | Metric | 6 Months Ended Jun 30, 2024 (in thousands, except per share) | 6 Months Ended Jun 30, 2025 (in thousands, except per share) | Change (in thousands, except per share) | | :-------------------------------------- | :-------------------------- | :-------------------------- | :----- | | Rental and other property revenues | $863,997 | $929,699 | +$65,702 | | Gain on sale of real estate and land | $0 | $237,204 | +$237,204 | | Net income available to common stockholders | $365,645 | $424,472 | +$58,827 | | Basic EPS | $5.69 | $6.60 | +$0.91 | | Diluted EPS | $5.69 | $6.59 | +$0.90 | [Condensed Consolidated Statements of Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Equity) Outlines changes in the equity section of Essex Property Trust, Inc.'s balance sheet, including stock and noncontrolling interests Essex Property Trust, Inc. - Condensed Consolidated Statements of Equity (in thousands) | Metric | Dec 31, 2024 (in thousands) | Jun 30, 2025 (in thousands) | Change (in thousands) | | :-------------------------------- | :-------------------------- | :-------------------------- | :-------------------- | | Total Stockholders' Equity | $5,537,046 | $5,635,249 | +$98,203 | | Noncontrolling Interest | $183,344 | $170,665 | -$12,679 | | Total Equity | $5,720,390 | $5,805,914 | +$85,524 | - Common stock dividends paid for the six months ended June 30, 2025, totaled **$330.96 million ($5.14 per share)**, an increase from **$314.67 million ($4.90 per share)** in the prior year[31](index=31&type=chunk)[32](index=32&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Summarizes the cash inflows and outflows from operating, investing, and financing activities for Essex Property Trust, Inc Essex Property Trust, Inc. - Condensed Consolidated Statements of Cash Flows (in thousands) | Metric | 6 Months Ended Jun 30, 2024 (in thousands) | 6 Months Ended Jun 30, 2025 (in thousands) | Change (in thousands) | | :-------------------------------------- | :-------------------------- | :-------------------------- | :----- | | Net cash provided by operating activities | $533,782 | $497,632 | -$36,150 | | Net cash used in investing activities | $(622,322) | $(320,090) | +$302,232 | | Net cash provided by financing activities | $(247,643) | $(185,504) | +$62,139 | | Unrestricted and restricted cash and cash equivalents at end of period | $64,151 | $67,884 | +$3,733 | - Proceeds from dispositions of real estate were **$364.16 million** for the six months ended June 30, 2025, compared to none in the prior year[35](index=35&type=chunk) [Condensed Consolidated Financial Statements of Essex Portfolio, L.P. (Unaudited)](index=13&type=section&id=Condensed%20Consolidated%20Financial%20Statements%20of%20Essex%20Portfolio%2C%20L.P.%20(Unaudited)) Provides the unaudited financial statements for Essex Portfolio, L.P., detailing its financial position, performance, and cash flows [Condensed Consolidated Balance Sheets](index=13&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Presents the assets, liabilities, and capital of Essex Portfolio, L.P. at specific reporting dates Essex Portfolio, L.P. - Condensed Consolidated Balance Sheets (in thousands) | Metric | Dec 31, 2024 (in thousands) | Jun 30, 2025 (in thousands) | Change (in thousands) | | :-------------------------------- | :-------------------------- | :-------------------------- | :-------------------- | | Total Assets | $12,927,359 | $13,181,490 | +$254,131 | | Total Liabilities | $7,176,120 | $7,342,654 | +$166,534 | | Total Capital | $5,720,390 | $5,805,914 | +$85,524 | [Condensed Consolidated Statements of Income and Comprehensive Income](index=14&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20and%20Comprehensive%20Income) Details the revenues, expenses, net income, and comprehensive income for Essex Portfolio, L.P. over the reporting periods Essex Portfolio, L.P. - Condensed Consolidated Statements of Income (in thousands, except per unit) | Metric | 3 Months Ended Jun 30, 2024 (in thousands, except per unit) | 3 Months Ended Jun 30, 2025 (in thousands, except per unit) | Change (in thousands, except per unit) | | :-------------------------------------- | :-------------------------- | :-------------------------- | :----- | | Rental and other property revenues | $439,782 | $467,610 | +$27,828 | | Gain on sale of real estate and land | $0 | $126,174 | +$126,174 | | Net income available to common unitholders | $96,184 | $229,143 | +$132,959 | | Basic EPS | $1.45 | $3.44 | +$1.99 | | Diluted EPS | $1.45 | $3.44 | +$1.99 | Essex Portfolio, L.P. - Condensed Consolidated Statements of Income (in thousands, except per unit) | Metric | 6 Months Ended Jun 30, 2024 (in thousands, except per unit) | 6 Months Ended Jun 30, 2025 (in thousands, except per unit) | Change (in thousands, except per unit) | | :-------------------------------------- | :-------------------------- | :-------------------------- | :----- | | Rental and other property revenues | $863,997 | $929,699 | +$65,702 | | Gain on sale of real estate and land | $0 | $237,204 | +$237,204 | | Net income available to common unitholders | $378,514 | $439,532 | +$61,018 | | Basic EPS | $5.69 | $6.60 | +$0.91 | | Diluted EPS | $5.69 | $6.59 | +$0.90 | [Condensed Consolidated Statements of Capital](index=15&type=section&id=Condensed%20Consolidated%20Statements%20of%20Capital) Outlines changes in the capital section of Essex Portfolio, L.P.'s balance sheet, including partners' capital and noncontrolling interests Essex Portfolio, L.P. - Condensed Consolidated Statements of Capital (in thousands) | Metric | Dec 31, 2024 (in thousands) | Jun 30, 2025 (in thousands) | Change (in thousands) | | :-------------------------------- | :-------------------------- | :-------------------------- | :-------------------- | | Total Partners' Capital | $5,615,238 | $5,704,378 | +$89,140 | | Noncontrolling Interest | $105,152 | $101,536 | -$3,616 | | Total Capital | $5,720,390 | $5,805,914 | +$85,524 | - Common unit distributions declared for the six months ended June 30, 2025, totaled **$342.62 million ($5.14 per unit)**, an increase from **$325.74 million ($4.90 per unit)** in the prior year[46](index=46&type=chunk)[47](index=47&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=18&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Summarizes the cash inflows and outflows from operating, investing, and financing activities for Essex Portfolio, L.P Essex Portfolio, L.P. - Condensed Consolidated Statements of Cash Flows (in thousands) | Metric | 6 Months Ended Jun 30, 2024 (in thousands) | 6 Months Ended Jun 30, 2025 (in thousands) | Change (in thousands) | | :-------------------------------------- | :-------------------------- | :-------------------------- | :----- | | Net cash provided by operating activities | $533,782 | $497,632 | -$36,150 | | Net cash used in investing activities | $(622,322) | $(320,090) | +$302,232 | | Net cash provided by financing activities | $(247,643) | $(185,504) | +$62,139 | | Unrestricted and restricted cash and cash equivalents at end of period | $64,151 | $67,884 | +$3,733 | - Proceeds from dispositions of real estate were **$364.16 million** for the six months ended June 30, 2025, compared to none in the prior year[50](index=50&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=20&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Provides supplementary information and explanations for the condensed consolidated financial statements [(1) Organization and Basis of Presentation](index=20&type=section&id=(1)%20Organization%20and%20Basis%20of%20Presentation) Details the company's structure, ownership, and the accounting principles used in preparing the financial statements - Essex Property Trust, Inc. is the sole general partner of Essex Portfolio, L.P., holding approximately **96.6% ownership interest** as of June 30, 2025[56](index=56&type=chunk) - As of June 30, 2025, the Company owned or had ownership interests in **259 operating apartment communities**, comprising **62,842 apartment homes**, primarily located in Southern California, Northern California, and the Seattle metropolitan area[57](index=57&type=chunk) - The Company adopted ASU No. 2023-05 "Business Combinations—Joint Venture Formations" as of January 1, 2025, which did not have a material impact on its financial position[59](index=59&type=chunk) [(2) Significant Transactions During the Six Months Ended June 30, 2025 and Subsequent Events](index=25&type=section&id=(2)%20Significant%20Transactions%20During%20the%20Six%20Months%20Ended%20June%2030%2C%202025%20and%20Subsequent%20Events) Describes major business activities, including acquisitions, dispositions, and other material events occurring during and after the reporting period Acquisition Activity (Six Months Ended June 30, 2025) (in millions) | Property Name | Location | Apartment Homes | Contract Price at Pro Rata Share (in millions) | | :-------------------- | :------- | :-------------- | :----------------------------- | | The Plaza | CA | 307 | $161.4 | | One Hundred Grand | CA | 166 | $105.3 | | ROEN Menlo Park | CA | 146 | $78.8 | | Revere Campbell | CA | 168 | $118.0 | | The Parc at Pruneyard | CA | 252 | $122.5 | | **Total Acquisitions** | | **1,039** | **$586.0** | Disposition Activity (Six Months Ended June 30, 2025) (in millions) | Property Name | Location | Apartment Homes | Sale Price at Pro Rata Share (in millions) | | :-------------------- | :------- | :-------------- | :----------------------------- | | Highridge | CA | 255 | $127.0 | | Essex Skyline | CA | 350 | $239.6 | | **Total Dispositions** | | **605** | **$366.6** | - The Company recognized a **$126.2 million** gain on sale from the disposition of Essex Skyline and a **$111.0 million** gain from Highridge[87](index=87&type=chunk) - Subsequent to quarter end, the Company formed Wesco VII, a new joint venture with a **$50.0 million** commitment from each partner to fund structured finance investments, and sold a held-for-sale property for **$97.5 million**[96](index=96&type=chunk)[97](index=97&type=chunk) [(3) Revenues](index=28&type=section&id=(3)%20Revenues) Provides a detailed breakdown of the company's revenue sources and their geographic and property category distribution Total Revenues by Source (in thousands) | Revenue Source | 3 Months Ended Jun 30, 2024 (in thousands) | 3 Months Ended Jun 30, 2025 (in thousands) | 6 Months Ended Jun 30, 2024 (in thousands) | 6 Months Ended Jun 30, 2025 (in thousands) | | :-------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Rental income | $432,141 | $460,686 | $849,377 | $916,546 | | Other property | $7,641 | $6,924 | $14,620 | $13,153 | | Management and other fees from affiliates | $2,573 | $2,223 | $5,286 | $4,717 | | **Total Revenues** | **$442,355** | **$469,833** | **$869,283** | **$934,416** | Rental and Other Property Revenues by Geographic Segment (in thousands) | Geographic Segment | 3 Months Ended Jun 30, 2024 (in thousands) | 3 Months Ended Jun 30, 2025 (in thousands) | 6 Months Ended Jun 30, 2024 (in thousands) | 6 Months Ended Jun 30, 2025 (in thousands) | | :----------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Southern California | $179,488 | $189,744 | $348,378 | $378,366 | | Northern California | $164,083 | $191,026 | $324,523 | $373,209 | | Seattle Metro | $73,782 | $78,297 | $145,695 | $155,511 | | Other real estate assets | $22,429 | $8,543 | $45,401 | $22,613 | | **Total** | **$439,782** | **$467,610** | **$863,997** | **$929,699** | Rental and Other Property Revenues by Property Category (in thousands) | Property Category | 3 Months Ended Jun 30, 2024 (in thousands) | 3 Months Ended Jun 30, 2025 (in thousands) | 6 Months Ended Jun 30, 2024 (in thousands) | 6 Months Ended Jun 30, 2025 (in thousands) | | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Same-property | $398,293 | $410,948 | $791,661 | $817,934 | | Acquisitions | $12,824 | $41,784 | $14,422 | $76,554 | | Non-residential/other, net | $29,176 | $14,711 | $58,488 | $35,432 | | Straight-line rent concessions | $(511) | $167 | $(574) | $(221) | | **Total** | **$439,782** | **$467,610** | **$863,997** | **$929,699** | [(4) Co-investments](index=29&type=section&id=(4)%20Co-investments) Details the company's investments in unconsolidated entities and their summarized financial performance - As of June 30, 2025, the Company had investments in five unconsolidated technology co-investments with a balance of **$67.1 million** and an aggregate commitment of **$86.0 million**[102](index=102&type=chunk) Combined Summarized Financial Information of Co-investments (in thousands) | Metric | Dec 31, 2024 (in thousands) | Jun 30, 2025 (in thousands) | Change (in thousands) | | :-------------------------------------- | :-------------------------- | :-------------------------- | :-------------------- | | Total Assets | $4,372,246 | $4,099,500 | -$272,746 | | Total Liabilities | $3,236,414 | $3,070,808 | -$165,606 | | Equity | $1,135,832 | $1,028,692 | -$107,140 | Combined Statements of Income for Co-investments (in thousands) | Metric | 6 Months Ended Jun 30, 2024 (in thousands) | 6 Months Ended Jun 30, 2025 (in thousands) | Change (in thousands) | | :-------------------------------------- | :-------------------------- | :-------------------------- | :----- | | Property revenues | $204,928 | $170,875 | -$34,053 | | Net operating income | $126,011 | $107,019 | -$18,992 | | Net loss | $(55,066) | $(29,794) | +$25,272 | | Company's share of net income | $22,018 | $22,186 | +$168 | [(5) Notes and Other Receivables](index=31&type=section&id=(5)%20Notes%20and%20Other%20Receivables) Presents a breakdown of various notes and other receivables, including changes and specific items like the preferred equity investment sponsor receivable Notes and Other Receivables (in thousands) | Metric | Dec 31, 2024 (in thousands) | Jun 30, 2025 (in thousands) | Change (in thousands) | | :-------------------------------------- | :-------------------------- | :-------------------------- | :-------------------- | | Note receivable, secured, 9.00%, due Oct 2026 | $60,538 | $63,685 | +$3,147 | | Note receivable, secured, 11.25%, due Oct 2027 | $39,187 | $41,478 | +$2,291 | | Receivable from preferred equity investment sponsor | $72,002 | $0 | -$72,002 | | Other receivables from affiliates | $5,646 | $5,882 | +$236 | | Straight-line rent receivables | $9,235 | $8,886 | -$349 | | Other receivables | $17,460 | $18,705 | +$1,245 | | Allowance for credit losses | $(529) | $(540) | -$11 | | **Total notes and other receivables** | **$206,706** | **$138,096** | **-$68,610** | - The **$72.0 million** receivable from a preferred equity investment sponsor was eliminated due to the consolidation of Artizan in January 2025 after the sponsor defaulted[108](index=108&type=chunk) [(6) Related Party Transactions](index=32&type=section&id=(6)%20Related%20Party%20Transactions) Discloses transactions and balances with affiliated entities, including management fees and outstanding loans Fees from Affiliates (in millions) | Period | 2024 (in millions) | 2025 (in millions) | Change (in millions) | | :-------------------------- | :--- | :--- | :----- | | Three Months Ended June 30 | $2.8 | $2.3 | -$0.5 | | Six Months Ended June 30 | $5.6 | $4.8 | -$0.8 | - As of June 30, 2025, **$5.9 million** in short-term loans remained outstanding from joint venture affiliates, classified within notes and other receivables[116](index=116&type=chunk) [(7) Debt](index=33&type=section&id=(7)%20Debt) Provides a detailed breakdown of the company's debt structure, including unsecured debt, mortgage notes, and lines of credit, along with interest rates Debt (in thousands) | Metric | Dec 31, 2024 (in thousands) | Jun 30, 2025 (in thousands) | Change (in thousands) | | :-------------------------------------- | :-------------------------- | :-------------------------- | :-------------------- | | Unsecured debt, net | $5,473,788 | $5,519,922 | +$46,134 | | Mortgage notes payable, net | $989,884 | $874,532 | -$115,352 | | Lines of credit and commercial paper | $137,945 | $365,000 | +$227,055 | | **Total debt, net** | **$6,601,617** | **$6,759,454** | **+$157,837** | Weighted Average Interest Rates | Debt Type | Dec 31, 2024 | Jun 30, 2025 | | :-------------------------------------- | :----------- | :----------- | | Fixed rate unsecured bonds public offering | 3.4% | 3.6% | | Variable rate term loan | 4.2% | 4.2% | | Lines of credit | 5.7% | 5.3% | | Commercial paper | N/A | 4.6% | | Mortgage notes payable | 4.2% | 4.2% | - In May 2025, the Operating Partnership obtained a new **$300.0 million unsecured term loan** and established a **$750.0 million commercial paper program** with a maximum aggregate amount of **$750.0 million**[92](index=92&type=chunk)[94](index=94&type=chunk) - In February 2025, the Operating Partnership issued **$400.0 million of senior unsecured notes** due April 1, 2035, with a **5.375% coupon rate**, using proceeds to repay **$500.0 million** of maturing notes[95](index=95&type=chunk) [(8) Segment Information](index=35&type=section&id=(8)%20Segment%20Information) Presents financial data disaggregated by the company's reportable geographic segments, including revenues, net operating income, and assets - The Company's Chief Operating Decision Maker (CODM) evaluates operating performance geographically, defining reportable segments as Southern California, Northern California, and Seattle Metro[124](index=124&type=chunk) Net Operating Income (NOI) by Segment (in thousands) | Segment | 3 Months Ended Jun 30, 2024 (in thousands) | 3 Months Ended Jun 30, 2025 (in thousands) | 6 Months Ended Jun 30, 2024 (in thousands) | 6 Months Ended Jun 30, 2025 (in thousands) | | :----------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Southern California | $128,077 | $134,780 | $247,235 | $268,772 | | Northern California | $116,381 | $132,198 | $226,554 | $257,617 | | Seattle Metro | $51,887 | $57,841 | $102,673 | $111,153 | | Other real estate assets | $16,903 | $7,362 | $34,503 | $18,107 | | **Total NOI** | **$313,248** | **$332,181** | **$610,965** | **$655,649** | Total Assets by Segment (in thousands) | Segment | Dec 31, 2024 (in thousands) | Jun 30, 2025 (in thousands) | Change (in thousands) | | :----------------- | :-------------------------- | :-------------------------- | :-------------------- | | Southern California | $4,162,462 | $4,094,046 | -$68,416 | | Northern California | $5,452,235 | $6,015,104 | +$562,869 | | Seattle Metro | $1,460,865 | $1,437,049 | -$23,816 | | Other real estate assets | $363,338 | $163,405 | -$199,933 | | **Net reportable operating segments - real estate assets** | **$11,438,900** | **$11,709,604** | **+$270,704** | [(9) Net Income Per Common Share and Net Income Per Common Unit](index=38&type=section&id=(9)%20Net%20Income%20Per%20Common%20Share%20and%20Net%20Income%20Per%20Common%20Unit) Details the calculation of basic and diluted earnings per share for common stockholders and unitholders Essex Property Trust, Inc. - Net Income Per Common Share | Metric | 3 Months Ended Jun 30, 2024 | 3 Months Ended Jun 30, 2025 | 6 Months Ended Jun 30, 2024 | 6 Months Ended Jun 30, 2025 | | :-------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Basic EPS | $1.45 | $3.44 | $5.69 | $6.60 | | Diluted EPS | $1.45 | $3.44 | $5.69 | $6.59 | Essex Portfolio, L.P. - Net Income Per Common Unit | Metric | 3 Months Ended Jun 30, 2024 | 3 Months Ended Jun 30, 2025 | 6 Months Ended Jun 30, 2024 | 6 Months Ended Jun 30, 2025 | | :-------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Basic EPS | $1.45 | $3.44 | $5.69 | $6.60 | | Diluted EPS | $1.45 | $3.44 | $5.69 | $6.59 | - Weighted average convertible OP Units and certain stock options were excluded from diluted EPS calculations as they were anti-dilutive[134](index=134&type=chunk)[135](index=135&type=chunk)[138](index=138&type=chunk) [(10) Derivative Instruments and Hedging Activities](index=40&type=section&id=(10)%20Derivative%20Instruments%20and%20Hedging%20Activities) Describes the company's use of derivative financial instruments to manage interest rate risk and their accounting treatment - As of June 30, 2025, the Company had five interest rate swap contracts and one forward starting interest rate swap contract with an aggregate notional amount of **$547.5 million**, primarily fixing interest rates on unsecured term loans and variable rate mortgage notes[139](index=139&type=chunk) - The aggregate carrying value of interest rate swap contracts was an asset of **$3.1 million** as of June 30, 2025[140](index=140&type=chunk) - Total return swap contracts with a notional amount of **$220.4 million** convert fixed mortgage notes to floating rates but do not qualify for hedge accounting[203](index=203&type=chunk) [(11) Commitments and Contingencies](index=40&type=section&id=(11)%20Commitments%20and%20Contingencies) Discloses potential future obligations and legal matters that could impact the company's financial position or results - The Company is a defendant in purported class actions alleging collusion to artificially increase rents using RealPage, Inc. software[142](index=142&type=chunk) - Management believes that the ultimate disposition of current legal and regulatory proceedings will not result in a material adverse effect on the Company's financial condition, results of operations, or cash flows[142](index=142&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=42&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial performance, condition, and operational results. It details revenue and expense trends, liquidity, capital resources, and market considerations, highlighting significant increases in property revenues and net income, driven by acquisitions and gains on asset sales, while also discussing debt management and future development plans [Overview and Market Considerations](index=42&type=section&id=Overview%20and%20Market%20Considerations) Provides an executive summary of the company's business, market presence, and the macroeconomic factors influencing its operations - Essex is a self-administered and self-managed REIT that acquires, develops, redevelops, and manages apartment communities on the West Coast of the United States[144](index=144&type=chunk) - As of June 30, 2025, the Company owned or had ownership interests in **259 operating apartment communities**, comprising **62,842 apartment homes**[146](index=146&type=chunk) - The Company's apartment communities are predominantly located in Southern California, Northern California, and the Seattle Metro area[147](index=147&type=chunk) - Macroeconomic conditions, including geopolitical tensions, have not negatively impacted the Company's ability to access traditional funding sources or meet credit covenants[149](index=149&type=chunk) [Comparison of the Three Months Ended June 30, 2025 to the Three Months Ended June 30, 2024](index=43&type=section&id=Comparison%20of%20the%20Three%20Months%20Ended%20June%2030%2C%202025%20to%20the%20Three%20Months%20Ended%20June%2030%2C%202024) Analyzes the company's financial performance and operational results for the three-month period compared to the prior year Same-Property Revenues (3 Months Ended June 30) (in thousands) | Metric | 2024 (in thousands) | 2025 (in thousands) | Change (in thousands) | % Change | | :-------------------------- | :-------------------------- | :-------------------------- | :----- | :------- | | Southern California | $164,177 | $169,282 | +$5,105 | 3.1% | | Northern California | $161,598 | $167,129 | +$5,531 | 3.4% | | Seattle Metro | $72,518 | $74,537 | +$2,019 | 2.8% | | **Total Same-Property Revenues** | **$398,293** | **$410,948** | **+$12,655** | **3.2%** | - Non-Same Property Revenues increased by **$15.2 million (36.6%)** to **$56.7 million**, primarily due to acquisitions in 2024 and 2025, partially offset by dispositions[154](index=154&type=chunk) - Property operating expenses (excluding real estate taxes) increased by **9.1%** to **$86.4 million**, driven by acquisitions and increases in utilities, maintenance, and personnel costs[155](index=155&type=chunk) - Interest expense increased by **10.5%** to **$65.3 million**, mainly due to new debt issuances and increased borrowing on credit facilities, partially offset by debt payoffs[159](index=159&type=chunk) [Comparison of the Six Months Ended June 30, 2025 to the Six Months Ended June 30, 2024](index=44&type=section&id=Comparison%20of%20the%20Six%20Months%20Ended%20June%2030%2C%202025%20to%20the%20Six%20Months%20Ended%20June%2030%2C%202024) Analyzes the company's financial performance and operational results for the six-month period compared to the prior year Same-Property Revenues (6 Months Ended June 30) (in thousands) | Metric | 2024 (in thousands) | 2025 (in thousands) | Change (in thousands) | % Change | | :-------------------------- | :-------------------------- | :-------------------------- | :----- | :------- | | Southern California | $326,405 | $337,705 | +$11,300 | 3.5% | | Northern California | $320,954 | $332,282 | +$11,328 | 3.5% | | Seattle Metro | $144,302 | $147,947 | +$3,645 | 2.5% | | **Total Same-Property Revenues** | **$791,661** | **$817,934** | **+$26,273** | **3.3%** | - Non-Same Property Revenues increased by **$39.4 million (54.5%)** to **$111.8 million**, primarily due to acquisitions in 2024 and 2025[163](index=163&type=chunk) - Interest and other income decreased by **$55.7 million (83.4%)** to **$11.1 million**, primarily due to a **$42.6 million** decrease in gains from legal settlements compared to the prior year[169](index=169&type=chunk) - Gain on sale of real estate and land of **$237.2 million** was attributable to the dispositions of Highridge and Essex Skyline in 2025[167](index=167&type=chunk) [Liquidity and Capital Resources](index=46&type=section&id=Liquidity%20and%20Capital%20Resources) Discusses the company's ability to generate and obtain cash to meet its financial obligations and fund its operations and growth - As of June 30, 2025, the Company had **$58.7 million** of unrestricted cash and cash equivalents and **$82.2 million** in marketable securities[173](index=173&type=chunk) - The Company's credit ratings are **Baa1/Stable (Moody's)** and **BBB+/Stable (Standard and Poor's)**[174](index=174&type=chunk) - In July 2025, the Company amended its revolving credit facility, increasing borrowing capacity to **$1.5 billion** and extending maturity to January 2030[175](index=175&type=chunk) - The Company has a **$750.0 million commercial paper program** and a **$900.0 million ATM program**, with **$302.7 million** remaining under its **$500.0 million** stock repurchase plan[176](index=176&type=chunk)[179](index=179&type=chunk)[182](index=182&type=chunk) [Development and Predevelopment Pipeline](index=48&type=section&id=Development%20and%20Predevelopment%20Pipeline) Outlines the company's ongoing and planned real estate development projects, including estimated costs and timelines - The development pipeline consists of one consolidated project (**543 apartment homes**) and various predevelopment projects[185](index=185&type=chunk) Development Pipeline Costs (in millions) | Metric | Amount (in millions) | | :-------------------------- | :----- | | Total Incurred Costs (as of Jun 30, 2025) | $105.6 | | Estimated Remaining Project Costs | $250.0 | | **Total Estimated Project Costs** | **$356.0** | [Derivative Activity](index=48&type=section&id=Derivative%20Activity) Explains the company's use of derivative financial instruments to manage specific financial risks, primarily interest rate fluctuations - The Company uses interest rate swaps, interest rate caps, and total return swap contracts to manage interest rate risks and stabilize interest expense[187](index=187&type=chunk) - As of June 30, 2025, the Company had **$547.5 million** in notional amount of interest rate swaps and forward starting interest rate swaps designated as cash flow hedges[203](index=203&type=chunk) - The Company also has **$220.4 million** in notional amount of total return swap contracts that convert fixed mortgage notes to floating rates, but these do not qualify for hedge accounting[203](index=203&type=chunk) [Alternative Capital Sources](index=48&type=section&id=Alternative%20Capital%20Sources) Describes the various non-traditional or supplementary methods the company uses to raise capital for its investments and operations - Co-investments serve as an alternative capital source for acquisitions of both operating and development communities[188](index=188&type=chunk) - As of June 30, 2025, the Company had an interest in **7,694 apartment homes** in operating communities with joint ventures and technology co-investments, with a total book value of **$360.9 million**[188](index=188&type=chunk) [Off-Balance Sheet Arrangements](index=48&type=section&id=Off-Balance%20Sheet%20Arrangements) Discloses contractual arrangements that have a material effect on the company's financial condition but are not recognized on the balance sheet - The Company has unconsolidated interests in certain joint ventures[189](index=189&type=chunk) - The Company believes these unconsolidated investments do not have a materially different impact on its liquidity, cash flows, capital resources, credit, or market risk[189](index=189&type=chunk) [Critical Accounting Estimates](index=49&type=section&id=Critical%20Accounting%20Estimates) Identifies the accounting estimates that require significant judgment and could have a material impact on the company's financial statements - Critical accounting estimates relate principally to accounting for the acquisition of investments in real estate and evaluating the recoverability of rental property carrying values[190](index=190&type=chunk) - The Company's critical accounting policies and estimates have not changed materially from the information reported in its annual report on Form 10-K for the year ended December 31, 2024[191](index=191&type=chunk) [Forward-Looking Statements](index=50&type=section&id=Forward-Looking%20Statements) Provides a cautionary statement regarding the inherent uncertainties and risks associated with future-oriented information presented in the report - Forward-looking statements involve known and unknown risks, uncertainties, and other factors that could cause actual results to differ materially from expectations[193](index=193&type=chunk) - Key risk factors include occupancy rates, rental demand, interest rates, inflation, geopolitical tensions, credit rating maintenance, and successful management of co-investment partnerships[193](index=193&type=chunk) [Funds from Operations Attributable to Common Stockholders and Unitholders (FFO)](index=50&type=section&id=Funds%20from%20Operations%20Attributable%20to%20Common%20Stockholders%20and%20Unitholders%20(FFO)) Presents a non-GAAP measure of operating performance for REITs, adjusting net income for certain non-cash items - FFO and Core FFO are supplemental operating performance measures, not alternatives to GAAP net income or cash from operating activities[194](index=194&type=chunk)[195](index=195&type=chunk) Funds from Operations (FFO) (in thousands, except per share) | Metric | 3 Months Ended Jun 30, 2024 (in thousands, except per share) | 3 Months Ended Jun 30, 2025 (in thousands, except per share) | 6 Months Ended Jun 30, 2024 (in thousands, except per share) | 6 Months Ended Jun 30, 2025 (in thousands, except per share) | | :-------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net income available to common stockholders | $92,914 | $221,362 | $365,645 | $424,472 | | **FFO attributable to common stockholders and unitholders** | **$258,787** | **$268,838** | **$564,331** | **$533,486** | | FFO per share-diluted | $3.89 | $4.03 | $8.49 | $8.00 | | **Core FFO attributable to common stockholders and unitholders** | **$261,965** | **$268,554** | **$516,648** | **$533,088** | | Core FFO per share-diluted | $3.94 | $4.03 | $7.77 | $8.00 | [Net Operating Income (NOI)](index=52&type=section&id=Net%20Operating%20Income%20(NOI)) Presents a key operational performance metric for real estate, reflecting property-level profitability before depreciation and financing costs - NOI and Same-Property NOI are important supplemental performance measures, reflecting the operating performance of communities before depreciation and corporate/financing costs[201](index=201&type=chunk) Net Operating Income (NOI) (in thousands) | Metric | 3 Months Ended Jun 30, 2024 (in thousands) | 3 Months Ended Jun 30, 2025 (in thousands) | 6 Months Ended Jun 30, 2024 (in thousands) | 6 Months Ended Jun 30, 2025 (in thousands) | | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Earnings from operations | $137,450 | $279,700 | $269,809 | $536,781 | | **NOI** | **$313,248** | **$332,181** | **$610,965** | **$655,649** | | **Same-Property NOI** | **$281,581** | **$290,856** | **$556,107** | **$574,519** | [Item 3. Quantitative and Qualitative Disclosures About Market Risks](index=53&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risks) This section details the Company's exposure to market risks, primarily interest rate fluctuations, and its strategies to mitigate these risks. It highlights the use of derivative instruments like interest rate swaps and forward starting interest rate swaps to manage variable rate debt and stabilize interest expense [Interest Rate Hedging Activities](index=53&type=section&id=Interest%20Rate%20Hedging%20Activities) Details the company's strategies and use of financial instruments to mitigate exposure to fluctuations in interest rates - The Company uses interest rate swaps and forward starting interest rate swaps as cash flow hedges to manage interest rate risk[203](index=203&type=chunk) Cash Flow Hedge Derivative Instruments (as of June 30, 2025, in thousands) | Instrument | Notional Amount (in thousands) | Maturity Date | Carrying and Estimated Fair Value (in thousands) | | :-------------------------------- | :-------------- | :------------ | :-------------------------------- | | Interest rate swaps | $497,500 | 2026-2030 | $3,100 | | Forward starting interest rate swap | $50,000 | 2030 | $0 | | **Total cash flow hedges** | **$547,500** | **2026-2030** | **$3,100** | - A sensitivity analysis shows that a **+50 basis point** change in 10-year Treasury bill interest rates would result in an estimated fair value change of **+$9.18 million**, while a **-50 basis point** change would result in **-$3.17 million**[203](index=203&type=chunk) [Interest Rate Sensitive Liabilities](index=54&type=section&id=Interest%20Rate%20Sensitive%20Liabilities) Identifies and quantifies the company's liabilities that are subject to changes in interest rates, and the associated risk management objectives - The Company's interest rate risk management objective is to limit the impact of interest rate changes on earnings and cash flows and to lower overall borrowing costs[204](index=204&type=chunk) Interest Rate Sensitive Liabilities (as of June 30, 2025, in thousands) | Debt Type | Total Principal Amount (in thousands) | Average Interest Rate | Fair Value (in thousands) | | :---------------- | :--------------------- | :-------------------- | :--------- | | Fixed rate debt | $5,660,880 | 3.6% | $5,387,534 | | Variable rate debt | $1,131,301 | 4.2% | $1,124,063 | [Item 4. Controls and Procedures](index=54&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of disclosure controls and procedures for both Essex Property Trust, Inc. and Essex Portfolio, L.P. as of June 30, 2025, with no material changes to internal control over financial reporting during the quarter. It also acknowledges the inherent limitations of any control system [Essex Property Trust, Inc. Controls and Procedures](index=54&type=section&id=Essex%20Property%20Trust%2C%20Inc.%20Controls%20and%20Procedures) Confirms the effectiveness of disclosure controls and internal control over financial reporting for Essex Property Trust, Inc - Essex Property Trust, Inc.'s disclosure controls and procedures were effective at a reasonable assurance level as of June 30, 2025[206](index=206&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2025[207](index=207&type=chunk) [Essex Portfolio, L.P. Controls and Procedures](index=55&type=section&id=Essex%20Portfolio%2C%20L.P.%20Controls%20and%20Procedures) Confirms the effectiveness of disclosure controls and internal control over financial reporting for Essex Portfolio, L.P - Essex Portfolio, L.P.'s disclosure controls and procedures were effective at a reasonable assurance level as of June 30, 2025[209](index=209&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2025[210](index=210&type=chunk) [Limitations on Effectiveness of Controls](index=54&type=section&id=Limitations%20on%20Effectiveness%20of%20Controls) Acknowledges the inherent limitations of any internal control system, emphasizing that it provides reasonable, not absolute, assurance - Management recognizes that controls and procedures can only provide reasonable assurance due to inherent limitations and resource constraints[208](index=208&type=chunk)[211](index=211&type=chunk) PART II. OTHER INFORMATION Contains additional information not covered in the financial statements, including legal proceedings, risk factors, and equity sales [Item 1. Legal Proceedings](index=55&type=section&id=Item%201.%20Legal%20Proceedings) The Company is involved in various lawsuits, including purported class actions related to revenue management software. However, management does not believe any current legal proceedings, individually or in aggregate, would have a material adverse effect on the Company's financial condition, results of operations, or cash flows - The Company is a party to various lawsuits, including purported class actions against RealPage, Inc. and multifamily housing lessors[212](index=212&type=chunk) - Management does not believe any current legal proceedings would have a material adverse effect on the Company's financial condition, results of operations, or cash flows[212](index=212&type=chunk) [Item 1A. Risk Factors](index=55&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors disclosed in the Company's annual report on Form 10-K for the year ended December 31, 2024. Investors should carefully consider these factors, as well as additional unknown or immaterial risks, which could materially affect the Company's financial condition, results of operations, or cash flows - No material changes to the risk factors disclosed in the Company's annual report on Form 10-K for the year ended December 31, 2024[213](index=213&type=chunk) - Investors should consider all disclosed risk factors, as well as additional unknown risks, which could materially affect the Company's financial condition, results of operations, or cash flows[213](index=213&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=55&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the Company's unregistered sales of equity securities, primarily through stock option exercises, restricted stock vesting, and OP unit exchanges, and outlines the status of its stock repurchase plan [Unregistered Sales of Equity Securities; Essex Portfolio, L.P.](index=55&type=section&id=Unregistered%20Sales%20of%20Equity%20Securities%3B%20Essex%20Portfolio%2C%20L.P.) Details the issuance of equity securities by Essex Portfolio, L.P. that were not registered under the Securities Act - During the three months ended June 30, 2025, Essex issued **45,768 shares** of common stock through stock option exercises, restricted stock vesting, and OP unit exchanges[215](index=215&type=chunk) - Net proceeds of **$2.9 million** from option exercises were contributed to the Operating Partnership in exchange for **13,418 OP Units**[215](index=215&type=chunk) [Stock Repurchases](index=56&type=section&id=Stock%20Repurchases) Provides information on the company's stock repurchase program, including authorization, activity, and remaining capacity - The Company has a **$500.0 million** stock repurchase plan approved in September 2022[216](index=216&type=chunk) - No shares were repurchased during the three months ended June 30, 2025, with **$302.7 million** of purchase authority remaining[216](index=216&type=chunk) [Item 3. Defaults Upon Senior Securities](index=56&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The Company reported no defaults upon senior securities - No defaults upon senior securities were reported[217](index=217&type=chunk) [Item 4. Mine Safety Disclosures](index=56&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the Company - Mine Safety Disclosures are not applicable to the Company[218](index=218&type=chunk) [Item 5. Other Information](index=56&type=section&id=Item%205.%20Other%20Information) This section provides details on securities trading plans of directors and executive officers and updates on federal income tax considerations [Securities Trading Plans of Directors and Executive Officers](index=56&type=section&id=Securities%20Trading%20Plans%20of%20Directors%20and%20Executive%20Officers) Discloses information about Rule 10b5-1 trading plans adopted by the company's directors and executive officers - Rylan Burns, EVP and CIO, entered a Rule 10b5-1 trading arrangement on May 22, 2025[220](index=220&type=chunk) - The plan allows for the potential exercise of stock options and sale of up to **1,289 shares** of common stock, expiring May 22, 2026[220](index=220&type=chunk) [Federal Income Tax Considerations](index=56&type=section&id=Federal%20Income%20Tax%20Considerations) Provides an updated discussion on the material federal income tax implications relevant to the company and its investors - The discussion on "Material Federal Income Tax Considerations" in Exhibit 99.1 replaces and supersedes previous information due to recent changes in applicable tax law[221](index=221&type=chunk) [Item 6. Exhibits](index=57&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed or furnished with the Form 10-Q, including credit agreements, certifications (Sarbanes-Oxley Act), tax considerations, and XBRL documents - Exhibits include the Sixth Amended and Restated Revolving Credit Agreement, Term Loan Agreement, and Sarbanes-Oxley Act certifications[222](index=222&type=chunk) - Exhibit 99.1 provides updated "Material Federal Income Tax Considerations"[222](index=222&type=chunk) [Signatures](index=58&type=section&id=Signatures) The report is signed by authorized officers of Essex Property Trust, Inc. and Essex Portfolio, L.P., including Barbara Pak (EVP and CFO) and Brennan McGreevy (Group VP and Chief Accounting Officer), on July 30, 2025 - The report was signed by Barbara Pak, Executive Vice President and Chief Financial Officer, and Brennan McGreevy, Group Vice President and Chief Accounting Officer, on **July 30, 2025**[227](index=227&type=chunk)

Core Insights - Essex Property Trust Inc. (ESS) reported a core funds from operations (FFO) per share of $4.03 for Q2 2025, exceeding the Zacks Consensus Estimate of $3.99 and reflecting a 2.3% year-over-year improvement [1][7] - Total revenues reached $469.8 million, slightly above the Zacks Consensus Estimate of $469.2 million, marking a 6.2% increase year-over-year [2] Financial Performance - Same-property revenues increased by 3.2% year-over-year, surpassing the estimate of 2.3%, while same-property operating expenses rose by 2.9%, lower than the estimated 3.8% [3][7] - Same-property net operating income (NOI) grew by 3.3% year-over-year, exceeding the estimate of 1.7% [3] Portfolio Activity - In Q2, ESS acquired two apartment communities in Northern California for $240.5 million, and sold a 350-unit community in Southern California for $239.6 million [4] - Subsequent to the quarter-end, the company sold a 243-unit community in Oakland, CA, for $97.5 million [4] Balance Sheet Position - As of June 30, 2025, ESS had $1.5 billion in liquidity, including cash and cash equivalents of $67.9 million, down from $107.9 million at the end of the previous quarter [5] - The company did not repurchase any shares during the second quarter [5] Guidance - For Q3 2025, ESS projects core FFO per share between $3.89 and $3.99, with the Zacks Consensus Estimate at $3.98 [6] - For the full year 2025, the projected core FFO per share is between $15.80 and $16.02, compared to the previous range of $15.56 to $16.06, with the Zacks Consensus Estimate of $15.94 falling within the new range [6][8]

Financial Data and Key Metrics Changes - The company reported a solid second quarter with core FFO per share exceeding the midpoint of guidance by $0.07, driven by better same property operations and lower operating expenses [12][4] - Full year core FFO per share guidance was increased by $0.10 to $15.91, reflecting improved same property revenue growth and reduced expenses [13][4] - Same property NOI is expected to grow 3.1% at the midpoint, a 40 basis points improvement from original guidance [14] Business Line Data and Key Metrics Changes - The second quarter saw a 3% blended rate growth for the same store portfolio, with Northern California and Seattle leading at 3.8% and 3.7% respectively, while Southern California lagged at 2% [5][4] - Los Angeles experienced a challenging environment with only 1.3% blended rent growth due to elevated supply deliveries and soft demand [6][4] - The suburban markets of San Mateo and San Jose outperformed with blended rate growth of 5.6% and 4.4% respectively [5] Market Data and Key Metrics Changes - The company expects modest U.S. GDP and job growth, with a stable job environment on the West Coast [8][4] - The transaction market for West Coast multifamily properties remains healthy, with deal volumes slightly higher in the second quarter compared to the previous year [10][4] - Average cap rates for institutional quality assets have remained in the mid-4% range, with some transactions in Northern California occurring in the low 4% range [10][4] Company Strategy and Development Direction - The company plans to maintain disciplined capital allocation by funding acquisitions with select dispositions, aiming to optimize risk-adjusted returns [11][4] - The focus is on fee simple acquisitions relative to cost of capital, with a strategic shift towards stabilized multifamily assets [82][4] - The company is also targeting a reduced size of the structured finance book, aiming for it to be less than 4% of core FFO by year-end [15][4] Management's Comments on Operating Environment and Future Outlook - Management noted that the softness in the macro economy is impacting demand, particularly in Southern California, which mirrors the broader U.S. economy [21][4] - The company anticipates a decline in supply deliveries in the second half of the year, which could improve the leasing environment [22][4] - Infrastructure investments related to the World Cup and Olympics are expected to enhance economic activity in Los Angeles over the next few years [6][4] Other Important Information - The company executed a $300 million delayed draw term loan and expanded its line of credit to $1.5 billion, enhancing balance sheet flexibility [16][4] - Preferred equity redemptions are expected to be backend loaded, impacting sequential core FFO growth [15][4] Q&A Session Summary Question: What drove the weaker blended pricing in Los Angeles? - Management indicated that the underperformance was due to heavier supply in the first half and slow delinquency recovery, not related to fire ordinances [19][4] Question: Can you elaborate on Northern California's performance? - Management noted strength in Northern California with job postings gradually increasing, and the seasonal curve performing slightly better than expected [24][4] Question: What are the expectations for concessions in LA? - Concessions in LA remain elevated compared to the rest of the portfolio, slightly higher than the previous year [44][4] Question: How does the commercial paper program compare to the revolver? - The commercial paper program offers about 70 basis points savings compared to the line of credit, used similarly as a temporary bridge to permanent financing [45][4] Question: What is the expected cadence of earnings from the structured investment book? - The structured finance investments book is expected to decrease significantly over the next few quarters, with repayments anticipated to reduce the book to $200-$250 million by the end of 2026 [97][4] Question: What are the implications of the recent CEQA reform? - Management views the CEQA reform as net positive, potentially encouraging development, although limited near-term impact is expected due to existing economic challenges [101][4]

Financial Data and Key Metrics Changes - The company reported a solid second quarter with core FFO per share exceeding the midpoint of guidance by $0.07, driven by better same property operations and lower operating expenses [11][12] - The full year core FFO per share guidance was increased by $0.10 to $15.91, reflecting a 3.15% same property revenue growth and a 3.25% same property expense growth [12][14] - Year-to-date, the company has received approximately $30 million in preferred equity redemptions, with an additional $175 million expected before year-end [14][16] Business Line Data and Key Metrics Changes - The second quarter saw a 3% blended rate growth for the same store portfolio, with Northern California and Seattle leading at 3.8% and 3.7% respectively, while Southern California lagged at 2% [4][5] - Los Angeles experienced a challenging environment with only 1.3% blended rent growth due to elevated supply deliveries and legacy delinquency issues [5][20] - The suburban markets of San Mateo and San Jose outperformed with blended rate growth of 5.6% and 4.4% respectively, attributed to limited housing supply and better job growth [4][5] Market Data and Key Metrics Changes - The investor appetite for West Coast multifamily properties remains healthy, with deal volumes slightly higher in the second quarter compared to the previous year [8] - Average cap rates for institutional quality assets have remained in the mid-4% range, with some transactions in Northern California occurring in the low 4% range [8][72] - The company has been able to generate average yields in the mid to high 4% from approximately $1 billion of acquisitions in Northern California over the last twelve months [9] Company Strategy and Development Direction - The company plans to maintain disciplined capital allocation by funding acquisitions with select dispositions, aiming to optimize risk-adjusted returns and drive NAV and core FFO per share accretion [10] - The focus is shifting towards fee simple acquisitions and stabilized multifamily assets, with a reduced emphasis on the mezzanine finance book due to its volatility [40][82] - The company is tracking several large infrastructure investments related to the World Cup and Olympics in Los Angeles, which are expected to improve economic activities in the market [5][36] Management's Comments on Operating Environment and Future Outlook - Management expects modest U.S. GDP and job growth, with a stable job environment on the West Coast [6] - The outlook for the second half of the year assumes market rents will moderate consistent with normal seasonality, with a potential for higher outcomes driven by increased hiring and a favorable operating environment [7][8] - Management noted that the softness in the macro economy is impacting demand, particularly in Southern California, which mirrors the broader U.S. economy [20][21] Other Important Information - The company has executed several transactions to enhance balance sheet flexibility, including a $300 million delayed draw term loan and an expanded line of credit [15][16] - The structured finance book is expected to decline significantly, with projections of being less than 4% of core FFO by year-end [14][98] Q&A Session Summary Question: What drove the weaker blended pricing in Los Angeles? - Management indicated that the underperformance in Los Angeles was due to heavier supply in the first half, slow delinquency recovery, and a soft demand environment [18][19] Question: Is there strength in Northern California that is not being fully appreciated? - Management confirmed strength in Northern California, with job postings gradually increasing and performance slightly better than expected [24][25] Question: What are the expectations for concessions in LA? - Concessions in LA remain elevated compared to the rest of the portfolio, slightly higher than the previous year but not dramatically worse [46][47] Question: How does the company view the impact of CEQA reform? - Management views CEQA reform as net positive, although it expects limited near-term impact due to existing economic challenges [102][104] Question: What is the expected cadence of earnings from the structured investment book? - The structured finance investments are expected to decline significantly over the next few quarters, with repayments anticipated to reduce the book size substantially [98][99]

Financial Performance - Net income per diluted share for Q2 2025 was $3.44, compared to $1.45 in Q2 2024, primarily driven by a gain on sale of real estate[11] - Core FFO per diluted share grew by 2.3% compared to Q2 2024, exceeding guidance by $0.07[11] - Same-property revenue and NOI grew by 3.2% and 3.3%, respectively, compared to Q2 2024[11] Portfolio Activity - Acquired two apartment communities with 420 units in Northern California for $240.5 million[11] - Sold a 350-unit apartment community in Southern California for $239.6 million, recording a gain of $126.2 million[11] - Sold a 243-unit apartment community in Oakland, CA for $97.5 million subsequent to quarter end[11] Capital Structure and Liquidity - Total market capitalization is $25.7 billion[12] - Available unsecured commitments stand at $1.356 billion, with total liquidity of $1.477 billion[14] - The company obtained a $300 million unsecured term loan and increased its unsecured credit facility from $1.2 billion to $1.5 billion[11] Debt and Credit Metrics - Debt to Total Assets ratio is 35%[3] - Secured Debt to Total Assets ratio is 4%[3] - Interest Coverage is 524%[3]